Thank you for standing by. This is the conference operator. Welcome to the Melcor REIT Third Quarter 2023 Results Conference Call. As a reminder, all participants are in listen-only mode, and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star, then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star, then zero. I would now like to turn the conference over to Naomi Stefura, Chief Financial Officer. Please go ahead. Thank you, Gailene. Good morning, and welcome to our conference call and webcast for the third quarter of 2023. With me on today's call is Randy Ferguson, Senior Vice President of the Melcor REIT. I will begin today's call with some mandatory statements, and then I'll walk you through a few financial highlights. Afterwards, I'll turn the call over to Randy to walk you through our operational highlights. Our goal is to keep our remarks to a brief, high-level review of the quarter and then open up the call for your questions. If you have not reviewed the materials related to this call, including the management's discussion and analysis and the financial statements, they are available on the Investor Relations section of our website at melcorreit.ca and on sedarplus.ca. Certain statements made during this call may be forward-looking. For a complete discussion of items that may cause actual results to differ, please refer to the Business Environment and Risk section of our annual MD&A. Second, we report our financial results in Canadian dollars and in accordance with IFRS. We supplement our financial reporting with non-standard measures, including FFO, AFFO, ACFO, and NOI. We believe these measures are important in evaluating our performance, but caution listeners that they may not be comparable to similar measures presented by other companies. These non-standard measures are defined and reconciled in our press release and in the MD&A. I will now walk everyone through some of the financial highlights of our results for Q3 2023. Our portfolio continues to produce stable results despite rising costs and inflationary pressures. Rental revenue was up 1% in Q3 2023 and is stable year-to-date. We saw a 2% increase in NOI in the quarter and a 1% increase year-to-date. Our same asset NOI calculations, which normalize out assets sold or classified as held for sale, was up 4% in the quarter and 2% year- to- date, primarily as a result of new leasing, which started paying rents in the quarter. In the quarter, FFO was down 4% to CAD 6.03 million or CAD 0.21 per unit. FFO was impacted by increases in finance costs correlated with higher interest rates on mortgage renewals. ACFO was down 14% at CAD 3.99 million or CAD 0.14 per unit in the quarter. ACFO continues to be impacted by increases made to our normalized capital expenditures and normalized tenant incentives and leasing commissions, which are included in the calculations. We have completed all of our 2023 mortgage renewals and are seeing higher interest rates on mortgages coming up. Our weighted average interest rate was 4.5% at the end of the quarter, up from 4.01% at year-end, and we expect to see this number increase as mortgages come up for renewal. Our monthly distribution remains at 4% per unit per month in the quarter, which we have paid at that rate since August 2021. This yielded a quarterly payout ratio of 88% in the quarter and 88% year-to-date based on ACFO. As of September 30, we had CAD 3.26 million in cash and CAD 9.73 million of undrawn liquidity under our revolving credit facility. I will now turn the call over to Randy to speak to our portfolio's operations and performance. Thank you, Naomi, and good morning. Our Melcor REIT portfolio continues to produce stable financial results in our third quarter, and we're encouraged by our leasing efforts to date. At September 30th, we've retained 92% of expiring leases and have commitments on forward renewals of almost 68,000 sq ft. This brings our committed occupancy to 91% across the portfolio. Year-to-date, we've completed almost 90,000 sq ft in new leasing, and our strategic approach on new leasing and our timely renewals with current customers are driving these results. Inflationary pressure is impacting operating costs, lease-up costs, and our capital expenditures. We're also experiencing an overall softening in office rents, and in turn, this affects our base rents as our leases renew. All these factors are creating a downward pressure on our operating cash flow. Notwithstanding, we expect our 2023 year to be on target. We'll continue to focus on ensuring our leasing teams have the resources to get their job done, and our property management professionals are working hard to provide our customers with a satisfactory experience. Now, we'd like to open the phone lines and take your questions. Gailene, please open the lines. Thank you. We'll now begin the question-and-answer session. To join the question queue, you may press star then one on your telephone keypad. You'll hear a tone acknowledging your request. If you're using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star then two. Our first question is from Alexander Augimeri with CIBC. Please go ahead. Hey, everyone. Thanks for taking my questions. I was just wondering if you have any details on the pricing for the held-for-sale assets. I noticed a slight decrease in the value on the balance sheet. Was this just simply a reaction to the higher rates? ... Oh, sorry, sorry. Just we're passing the phone around over here. Sorry, so your question was with relation to the assets held for sale on the balance sheet? Yeah. Yeah, and if you have any ideas on pricing going forward. Hang on one second. I'm just opening that up. Actually, I don't have my financial statements open, so just to try to see what the change was kind of quarter-over-quarter, so I don't have that right in front of me. Oh, it was really small. It wasn't... Yeah. And it's just if you got, what you're seeing from potential buyers, was it just a reaction to the higher rates? Yeah. Yeah, no, sorry. Absolutely. So the assets are recorded at the lower of list or fair value on the balance sheet. So I would say that these balance sheet amounts are reflective sort of the list prices. And I could let Randy speak a little bit more just to sort of general interest in the assets. Yeah. And the assets that are held for sale are in markets southern Alberta and Saskatchewan. The Regina market is a quiet market. We knew that when we decided that we were going to divest of those assets and that it would take some time to do so. Our list prices are what we consider to be the full value of the assets today. We've been and encouraged those who have shown some interest to address the assets on that basis. We are very close on two of the assets in terms of having them under contract, with strong interest in one of the two Office assets as well, that we're optimistic that we can have under contract before the end of the year. If the market were deeper, I think we would see more movement faster, but we're working in a quiet environment. Yeah. Yeah. That is that for you, Alex ander? Yeah. Yeah. Perfect. Yeah. And so, do you have any updates on the timeline-wise? I know, like you said, soon, but- Yeah. If you can provide any other information, that's fine. I actually expect two of the assets to go under contract today. Oh, okay. So we'll hear. Yeah, sounds good. And then I did have one further question on leasing renewals going forward. Can you give any information on what pricing you're seeing, and do you expect to maintain that low 90% retention rate? Yes, we do. You know, one of the things that we have noticed in terms of behavior is that tenants do not have a propensity to move right now. If they're being properly taken care of, and we're taking some great care to make sure that we're servicing our customers properly, then our tenants are going to stay. And in terms of softening, I think of the rents that were coming off, depends on when those leases were originally written. We were writing at much higher base rents in, for example, 2014, where we're seeing 10%-15% decreases in renewal rates compared to that year. A little later, sort of 2015, 2016, 2017, we're getting closer, the renewal rates are getting closer to the post rate for those tenants now. So I think we're going to see a bit of a work through in the first half of 2024, as all of those tenants who we who signed in 2014's new rental rates begin to hit our books sort of mid-2024. Okay. Yeah, that all makes sense. Yeah. Thanks so much for asking my questions. I can turn it back now. Thank you. The next question is from Tom Callaghan with RBC Capital Markets. Please go ahead. Hey, morning, Naomi, Randy. First one, maybe just a quick follow-up on the previous question there, but the two assets that you mentioned that you expect to go into contract today, are those Retail? Those are two of the Retail, correct? Yes, they are. Okay. And then when you mentioned the third, that kind of maybe you're hoping by year-end, was that actually one of the Office assets that isn't currently held for sale, or is that the third Retail property? Yes, that's one of the Office assets. Got it. Okay. Okay, thanks. And then kind of as you look at kind of the rest of the portfolio, is there anything else that kind of you could consider potentially non-core here over the next 12 months or so? Obviously, recognize the broader market backdrop, but just curious on any thoughts there. Well, we have lots of discussions at the board table around, you know, our assets, reminding ourselves what our core business is. We're pretty happy with the portfolio. I think, you know, would we like to be in less of a, an office environment in Edmonton? Sure. But, we know that selling assets like that in today's environment would be a significant loss. So instead, we turn our attention to leasing and... You know, if we're experiencing a certain amount of vacancy in our building and our, competitor across the street is experiencing similar vacancy, then we know where our next tenant is gonna come from. It's gonna come from across the street. So that's really the attitude we've adapted, in that soft market. We do have an Office asset in Kelowna, BC, that we would like, we're just now looking at leasing or listing proposals. It's a small asset. It's 30,000 sq ft. We put a lot of a disproportionate amount of resource managing that asset. You know, it's 700 km away, and the building is full. It's very stable, but it's, it's because of its size and it's a single asset in a single market, we, we think it behooves us to move that one onto the divestiture list. Got it. That, that makes sense. That's a good color. Thank you. Maybe just switching, switching gears to the, the debt side of things. Maybe just kind of some, some broad comments on, on how you're thinking about maturities into 2024. Naomi, correct me if I'm wrong, but I, I think you'd mentioned in the past that the majority of the maturities in, in next year are, are Retail properties, and, and there could be some up financing proceeds on those. Is that correct? Yeah, that's correct. So all of the renewals coming up next year are Retail or Industrial. So we have no Office renewals coming up next year, other than one of the offices that we did a one-year renewal on this year, if that makes sense. So, you know, we have to revisit that. But otherwise, the regular, like, you know, refinancings are all Retail and Industrial. Okay. They're currently all at sort of loan-to-value, less than 50%. They're sort of all at quite healthy leverage levels. Okay. That's, that's helpful. And just directionally, do you have kind of a ballpark figure in terms of average interest rate on those expiries next year for the mortgages? Yeah, they sort of range from 3.4% - 4.2%, and they're—I'd say an average of those two numbers was probably an average of those expiries. Got it. So, yeah, call it kind of 3.6% or 3.7% is probably a healthy average for those. Okay. Thank you. And maybe just last one for me is Randy, just on the Retail side. So good progress there this quarter and in terms of occupancy gains. Maybe just kind of broadly what you're seeing in that asset class and kind of expectations going forward. And then just small more housekeeping, but was any of the gain this quarter in occupancy related to kind of some of that seasonal leasing that could roll off into 4Q or no? No. There was no seasonal leasing in those numbers. So, in terms of Retail, what we're finding that in particular in areas that are still developing, we're seeing rents are holding, and we're seeing very strong... very strong. I'm trying to think of how to put that. A very strong interest on the national covenant level. Our leasing people came back from ICSC in Toronto with a long list of tenants that we have been talking to for over a period of time, and some of those deals look like they're moving towards fruition. So that's pretty exciting for us. We're also seeing some of the leasing in our existing portfolio. You know, we just finished a QSR deal with a multinational, and a renewal, and it renewed at triple the otherwise rent. So, you know, if you think about a neighborhood and people putting more emphasis in a pedestrian orientation, grocery, drugstores, dentists, doctors, daycare, the ubiquitous Dollarama, those kinds of services, QSR, obviously, those kinds of services are really strong. But, you know, this is also a market where our focus, our focus in Alberta, which had 38,000 new jobs created in the last quarter, and just significant numbers of in-migration, both interprovincial and international. So we're quite bullish right now. Awesome. That, that's great color. Thanks, guys. I'll turn it back. Thanks, Tom. Once again, if you have a question, please press Star then One. We'll just pause for a moment to see if any other callers want to join the queue. There appear to be no further questions, so I'd like to turn the call back over to Randy Ferguson for any closing remarks. Great. Thank you very much for your questions. And in closing, we certainly at our table want to offer our congratulations and our thanks to our leasing operations and management teams. They're doing a stellar job out there. And our groups that support us every day, our finance, administration, HR, communication, and IT teams, we're a close group, and we're very grateful for everybody's participation. So thank you for that, and thank you for taking time with us and reviewing our results. We know your time is valuable, and we do appreciate your participation. Look forward to reporting on the year as a whole when we meet next. So thanks, and have a great day. We'll talk again soon. This concludes today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.